Daniel Levy has a habit of pricing himself and Tottenham out of the best deals, be that new signings or commercial partners. With fresh investment in the crosshairs, that trait is an issue for Spurs.
“He has got so close so many times,” one source who has worked as a sponsorship consultant for several Premier League clubs told TBR Football, talking about the search for a naming rights partner for the Tottenham Hotspur Stadium, which has now gone unbranded for almost six years.
“He was trying for £25m. I’ve spoken to a lot of clubs that aren’t grounded in reality a lot of the time. Their justification for the price they’re asking is simply: ‘That’s what the chairman wants.’“
As it happens, Spurs themselves say they are in no hurry to secure a branding deal for the stadium, Daniel Levy’s magnum opus in his now nearly 25 years as chairman of the North London club. The brand benefits of having their name above the board when Beyonce or the NFL come to town are, the club’s commercial department say, enough to compensate for the missed revenue opportunity.
And yes, brand-building is important. The majority of bedrock Tottenham fans are probably sick of hearing it, but it’s commercial income which, under ENIC’s self-funding model, pays for transfers and player wages. And since their last season at White Hart Lane, commercial income has almost quadrupled, while wages have nearly doubled and transfer debt – astonishingly – has risen almost 500 per cent.
But could it be that this impulse to extract maximum value even at the expense of leaving immediate revenues on the table has cost Tottenham in their attempts to smoke out new investors?
In their financial statements for 2022-23, which were published last April, Levy revealed that he had enlisted the financial services firm Rothschild & Co to broker a “significant increase in our equity base.”
But despite persistent early links to Nasser Al-Khelaifi’s Qatar Sports Investments, Amanda Staveley’s PCP Capital Partners and several American private equity firms, the trail has since gone cold – and there was no mention of fundraising in Spurs’ most recent set of accounts.
Tottenham’s semi-miraculous qualification for the revamped, ultra-lucrative 36-team Champions League in 2024–25 may have eased any immediate pressure for fresh investment. But even with UEFA prize money now guaranteed, ENIC may still have to do the one thing they hate the most: spend their own cash. And that’s not a situation they want to be in.
The question in the meantime remains – is Levy’s intransigence on price costing Spurs?
Whose equity is Daniel Levy selling?
Tottenham’s ownership structure isn’t as simple as it looks on paper. So whose chunk of the club is the chairman actually trying to sell?
Well, maybe no-one’s. The board could issue fresh shares to a new investor at a set price, with the money paid then going to the club’s bank account, not Levy or ENIC’s
That would dilute Levy’s own stake of around 26 per cent, as well as the 61 per cent shareholding now presided over by the family trust of Joe Lewis, who stepped back from the club following his charges and subsequent conviction for insider trading in 2023.
The Lewis family trust is overseen by Katie Booth and Peter Charrington, two vastly experienced legal professionals based in the Bahamas. Charrington joined the Tottenham board as a non-executive director in March this year. The pair are listed as persons of significant control at Tottenham on Companies House.
Officially, any decision on the issuance of new shares would be signed off by the board of directors, who in turn can be appointed and removed by Booth and Charrington, essentially making them the gatekeepers of new shares, acting on behalf of the Lewis family trust.
The view among football finance experts and industry sources consulted by TBR Football, however, is that it is far more likely that ENIC or Levy are looking to realise some of the value of their initial investment between 2001 and 2007, which totalled around £90m. As we’ll explore later, it will be quite some markup.
That would mean selling their existing shares to a third party at a set price.
ENIC’s investment in Spurs is multi-layered but ultimately owned by Tavistock, the investment firm founded by Lewis in the 1980s whose investments include a range of luxury real estate, agriculture, energy and financial services businesses, as well as Tottenham.
Tavistock has two co-CEOs:
Nick Beucher – the husband of one of Joe Lewis’ granddaughters, Joanna Lewis; oversees Tavistock’s real estate arm
Josh Levy – the son of Daniel Levy; former investment banker
Two of Lewis’ children, Vivienne and Charles, are also managing directors for Tavistock. If Daniel Levy does find a new minority partner, Tavistock’s management team – which includes several other members of Lewis’ extended family – would presumably influence the final decision, whether formally or informally.
However, the corporate governance structure of Tavistock isn’t clear due to the company being based in the Bahamas, where financial reporting requirements are minimal. Who exactly would have the ultimate sign-off, therefore, isn’t clear.
Incidentally, Bloomberg has previously reported that talks between Lewis family representatives and would-be buyers have repeatedly collapsed because of the ambiguity surrounding the club’s ownership structure and who would be in charge post-deal.
A full takeover has never been ruled out, though.
If an unlikely full takeover does materialise, then the issue of the 30,000 or so minority shareholders in the club could theoretically become an issue.
“We have 30,000 shareholders who own approximately 13.5 per cent,” Levy revealed in 2023. “We run this club as if it is a public company.”
Very little information about the minority investors is publicly available, but they are a legacy of the days when Spurs were listed on the London Stock Exchange.
It is understood that they have no influence in the club’s day-to-day operations, but it’s conceivable that if a new outright owner steps forward, they may want to buy out the external investors to streamline operations.
These shares are traded every two months on the Asset Match platform. The last auction saw shares trade for around £3.22 each, which would value the club at £756m.
With the true marked value of the club estimated in the multiple billions, those shareholders – some of whom may have bought their stakes as far back as 1983 – could be in for a huge payday if a new owner did want to buy them out.
£775m Tottenham Hotspur Stadium debt structure is an issue
One new development this week: The Athletic’s Matt Slater has reported that £775m worth of stadium debt refinanced by Spurs in 2021 could be making Levy and ENIC less hasty to find a buyer.
“A potential fly in the Spurs sale ointment is that, if you take a look at the current loans, they are all as 2.5 to 3 per cent and they are locked in for 12-15 years,” explains University of Liverpool football finance lecturer and Price of Football podcast host Kieran Maguire in exclusive conversation with TBR Football.
“They have change-of-control clauses, so if a new owner comes in, the lenders can walk away. They are losing money because the deals were signed off in 2015-16 when rates were low. The banks want to walk away, but they can’t.
“At the same time, even if you end up paying an extra 2-3 per cent per year, it’s an extra £20m. It’s not going to put off a genuine bidder. If it comes to the Middle East, they will simply fund it through equity.”
So it isn’t that there’s anything wrong with the debt. The opposite, in fact. It might be too good a deal to walk away from, or at least a factor that would make the owners think twice before selling up.
Another factor highlighted by Slater for The Athletic is Spurs’ geography.
Reportedly, Tottenham’s distance – both cultural and physical – from London’s West End is a potential hiccup, with high-end investors keen for an ultra-salubrious location to park their wealth and entertain guests.
But Spurs are continuing to redevelop the immediate area in the immediate vicinity of their stadium and just this week filed an official planning application for four new residential towers that will loom over the 62,850-seater venue. A set of townhouses have also been included in the proposal.
The scheme is part of a grand plan for the site in N17 which also includes the under-construction hotel, a cinema and an extreme sports centre.
Tottenham are not worth £5bn
According to most sources, Levy and ENIC value Spurs at around £3.75bn.
That is a little rich compared with independent valuations from the likes of Forbes, Bloomberg and Football Benchmark and Sportico, but it’s not too wild an appraisal relative to, say, Chelsea at £2.5bn.
At least one report in recent weeks, however, has suggested that Spurs fancy themselves as a £5bn asset and are making progress on a deal that will bear out that figure.
No chance, says Maguire.
“Congratulations to Spurs for getting into the Champions League next season, but their chances of replicating that going forward are uncertain.
“Yes, they have a new manager, but things won’t necessarily change overnight. Last season, Spurs had a lower wage bill than Aston Villa. It was only just ahead of Newcastle. I think what we now have is a ‘Big Five’ and then ‘Pretty Big Three’ in the form of Spurs, Newcastle and Villa.
“That’s the case from a player investment point of view. So unless Spurs invest and invest well, they are going to find it difficult to get into the Champions League even when there is an 80 per cent chance each season that the Premier League will have five clubs in it.
“Trying to work out a value on that basis is difficult. It’s not making profits anymore, although a lot of the costs are non-cash based in the sense of amortisation and depreciation.
“From a minority shareholder’s point of view, what exactly are you getting? Daniel Levy isn’t going to give up the chairmanship role – so you’re basically just buying a seat in the director’s box. So, I don’t see the benefit at £5bn, especially when we’re talking about Liverpool being worth £4bn.””